100X short. Is "utterly gigantic leverage" an appropriate phrase, here? Like the man said: "This kid's got some SERIOUS s***."

Jerry Boyer: "I was a paid CNBC contributor for two years, 2008 and 2009. And my job was principally to appear on Kudlow’s show. I appeared as a guest well over a hundred times ..." Matt Goldwater, a former "news associate" at CNBC wrote in 2014: "I can confirm they get paid per appearance. I do not have any inside information, but presumably they are also paid to exclusively contribute to the network."
Apparently they demand "exclusive rights" from every guest except the A-listers. You're not allowed to appear on Bloomberg or, (by some reports) Fox Business on the same day as you appear on CNBC. When they can, they pursue complete exclusivity.
David

+11.5% ytd In Healthcare love my bruising....stk mkt +3.7%

FYI:
Regards,
Ted
http://video.cnbc.com/gallery/?video=3000375216

Yes. Its important to develop a complete will (or living trust) early and to keep it updated. It is also important to do some contingency financial planning regarding what happens if you do suffer from significant mental decline. And, it is important to self evaluate your financial mental fitness as time passes (and that, if you are in a long term relationship with someone, that you discuss the importance of honestly reporting to each other about what you observe about that significant other).
My father lived with dementia for the last 15 years of his life. He had handled most of my parent's financial affairs during their 60 years together. My parents did very little "what if" planning regarding this possible outcome. Fortunately, I was able to make myself available to handle their financial and many of their other personal affairs during those years. This experience clearly showed me that planning for this possible outcome is important.

It's interesting. I remember being told when I was younger that the first thing you forget when you've been drinking are the things you most recently learned- like driving. At that time, the point was don't drink and drive.
This says that the first things to be forgotten due to mental disease are things you've known for a very long time, rather than the stuff you just learned, like how to use your new iPhone or the name of your second wife who you've only been married to for 10 years rather than the 70 years you've been able to count backwards from 100 by 7.
I'm not trying to make any real point other than finding it interesting, but I guess it must mean the parts of the mind affected by alcohol are different than those affected by mental disease.

""The financial crisis was meant to have exploded the credit bubble once and for all, but there's very little sign of it. Rising public indebtedness has taken over where households and companies left off.""
LOL. The financial crisis would have busted the credit bubble if governments let it. Instead, they scrambled to reflate it (and then some) as soon as possible. As I've noted previously, no one learned anything - the only question was, "How fast can we reboot to a few years prior?"
Now you have:
"The combined public debt of the G7 economies alone has grown by close to 40 percentage points to around 120pc of GDP since the start of the crisis, while globally, the total debt of private non-financial sectors has risen by 30pc, far in advance of economic growth."
"need constant infusions of financially destabilising debt to keep them going."
...which is certain to end well.

This somewhat alarmist headline by Jeremy Warner caught my eye this morning. He is a widely read British financial commentator with about 30 years in the business. Its interesting to read a commentary coming from that side of the pond.
Here are a couple of "facts" I gleaned from the article:
"According to investment bank Jefferies, some 70pc of all German bunds now trade on a negative yield. In France, it's 50pc, and even in Spain, which was widely thought insolvent only a few years ago, it's 17pc."
"The combined public debt of the G7 economies alone has grown by close to 40 percentage points to around 120pc of GDP since the start of the crisis, while globally, the total debt of private non-financial sectors has risen by 30pc, far in advance of economic growth."
Here are three of the author's conclusions:
"The financial crisis was meant to have exploded the credit bubble once and for all, but there's very little sign of it. Rising public indebtedness has taken over where households and companies left off."
"For all kinds of reasons, advanced economies, and perhaps emerging ones too, seem to have run out of productivity-enhancing growth and therefore need constant infusions of financially destabilising debt to keep them going."
"The flip side of the cheap money story is soaring asset prices. The bond market bubble is just the half of it; since most other assets are priced relative to bonds, just about everything else has been going up as well."
The author does not lay out a clear case for why a mass default lies ahead rather than some other less dramatic "muddle our way through" outcome. But perhaps he does successfully argue there is a fat tail risk for that or another similarly disruptive outcome ahead for the global economy in the not too distant future.
Here is the link:
telegraph.co.uk/finance/comment/jeremy-warner/11569329/Jeremy-Warner-Negative-interest-rates-put-world-on-course-for-biggest-mass-default-in-history.html

FYI: Health care stock funds are the top-performing sector category for the past 15 years, but they were bruised Monday by sharp declines in biotech and medical stocks. Health care fund performance has soared above gains by runners-up communications and consumer discretionary in recent years.
Regards,
Ted
http://license.icopyright.net/user/viewFreeUse.act?fuid=MTkyODczMDI=
Enlarged Graphic:
http://news.investors.com/photopopup.aspx?path=WEBlv042815.jpg&docId=749870&xmpSource=&width=1000&height=1152&caption=&id=749871

FYI: Studies show that the ability to perform simple math problems, as well as handling financial matters, are typically one of the first set of skills to decline in diseases of the mind, like Alzheimer’s.
Regards,
Ted
http://www.nytimes.com/2015/04/25/your-money/as-cognitivity-slips-financial-skills-are-often-the-first-to-go.html?ref=your-money

Hi Dex,
I did not follow your analyses in any detail, but I believe you are being far too pessimistic. A 30-year projected retirement is doable with less funds than your analyses suggest.
How do I know this? I did a few calculations using the Monte Carlo simulator that I referenced on this exchange. Please give it a try using your specific constraints. I believe it offers some hope for initial retirement portfolio values in the one-half to one million dollar range for a COLA adjusted withdrawal rate starting at $30,000 annually.
Using end of period portfolio survival probability as the success criteria, a one-half million dollar initial portfolio worth is only a coin flip likelihood. That’s not acceptable. But a one million dollar portfolio has a survival likelihood in excess of 90%. Those odds were estimated with a diversified portfolio with an average annual return of 8% and a standard deviation of 15%.
I did some what-if scenarios also. For the inadequate one-half million dollar portfolio, the survival likelihood odds can be incrementally improved by about 10% if a more aggressive equity portfolio is postulated, or if a portfolio with a reduction in standard deviation is assembled, or if a flexible drawdown strategy is practiced. Flexible meaning that COLA raises are held to zero for negative return years. These tactics can be individually deployed or used in concert.
My analyses were very incomplete and were done for illustrative purposes only.
Stay strong, all is not lost. And use the referenced Monte Carlo code.
Best Wishes.

i think we have at least 5 more years of this low interest rate environment. It could be more. The debt, aging population, unemployment, wage stagnation will help to keep it down.

I hope you prove prescient. I would be thrilled with just a year or two more of these low yields. But I sure haven't liked the action in TLT (20 year bond) since the bottom in yields around the beginning of February. I worry (I always worry) 2015 will be the reverse of 2014 the former being everyone was shocked how low rates fell with the latter everyone being shocked how quickly rates move back up. Time for the bank loan/floating rate funds?

http://www.sec.gov/Archives/edgar/data/709364/000094937715000158/e34519_isi-rvvrvpsupp.htm
497 1 e34519_isi-rvvrvpsupp.htm
The Royce Fund
Supplement to the Investment, Service, and Institutional Class Shares Prospectus Dated May 1, 2014
Royce Value Fund
Royce Value Plus Fund
On April 22, 2015, the Board of Trustees of The Royce Fund approved name changes and investment policy changes for the Funds listed above. All of these changes will take effect on May 1, 2015. The investment policies and operations of each Fund will not change except as specifically described below.
Royce Value Fund
Royce Value Fund will be renamed Royce Small-Cap Value Fund. The Fund will invest, under normal circumstances, at least 80% of its net assets in equity securities of companies with stock market capitalizations up to $3 billion.
Royce Value Plus Fund
Royce Value Plus Fund will be renamed Royce Smaller-Companies Growth Fund. The Fund will invest, under normal circumstances, at least 80% of its net assets in equity securities of companies with stock market capitalizations up to $7.5 billion.
April 28, 2015
RVV-RVP-ISI

Europe is at the epicenter of the global experiment with negative interest rates. Bonds trading with negative yields are commonplace there. But, even in the US, JP Morgan Chase will soon begin to charge certain customers a 1% per year fee on deposits. Is my idea that cash sets a floor on interest rates becoming outdated? How unstable are things becoming that I am even asking this question?
This topic is impacting my thinking about my portfolio. (Maybe my next annual portfolio review will find me adding more to my defensive allocation to “cash”.) If anyone has a properly functioning crystal ball I would appreciate some guidance concerning what the next couple of years holds for us!
Anyway, here is a fairly short BloomburgBusiness article about this topic:
bloomberg.com/news/articles/2015-04-23/negative-interest-rates-may-spark-existential-crisis-for-cash

I don't think anyone would recommend retiring with just 5 years of cash flow in the bank and $300,000 in other investments. So, let's use $1,000,000 as your goal plus the first 5 years with SS.
Interest rate 5%
Years 30
Starting amount $1,050,000
Future Value: $4,538,039.49
Interest rate 3.5% - same as expense growth rate
Years 30
Starting amount $1,050,000
Future Value: $2,947,133.39
So, give up the hope ...
Here is my 2016 cash flow
(29,500) Spending
152 Cash Back
222 Cecking/Int
28,920 Dividends/Interest
10,713 Money Market
13,814 Pension
24,321 Total

Here's an example:
$50,000 budget/ year
250,000 Spending
-000,000 Pension - you don't have one
-100,000 Social Security
-100,000 Dividends/Interest Apx 300,000 paying dividends/interest You have other $
= 50,000 withdraw from savings - 10,000 into money market, 40,000 into other
So you have:
300,000 paying dividends/interest
10,000 MM
40,000 other
$350,000 Total + your other money
250,000 Spending
-000,000 Pension - you don't have one
-000,000 Social Security - retire before eligible or not there for you
-100,000 Dividends/Interest Apx 300,000 paying dividends/interest You have other $
= 150,000 withdraw from savings - 30,000 into money market, 120,000 into other
So you have:
300,000 paying dividends/interest
30,000 MM
120,000 other
$450,000 Total + your other money
You don't say how old you are but let's assume you are 30.
BUDGET
Interest rate 3.5%
Years 30
Starting amount $50,000 - budget
Future Value: $140,339.69/Year
Dividend/Interest Income:
Interest rate 5%
Years 30
Starting amount $350,000
Future Value: $$1,512,679.83
http://www.investopedia.com/calculator/fvcal.aspx
So, at a minimum, if you get SS you need 1.5M in savings in 30 years.
If, you don't get SS you need $1,944,874.07

Do this exercise and let us know how it affect your retirement investment.
Line item budget for 5 years
- pension
- social security
- dividends
= amount to withdraw from investments (or deposit). Put 1 year of this in a money market account, the remainder in an interest bearing low risk investment.
This does 2 things
1 - when your investments are positive you can withdraw years 6,7... and deposit.
2 - when your investments are negative (market downturn) you have 5 years you don't have withdraw any money.

One of the Best (smart guys): Playing Defense
Similarly, the Yacktman Fund’s board sued its manager, Don Yacktman, in the late 1990s. According to the board, Yacktman didn’t adhere to the fund’s charter. He, like manager Steve Romick at FPA Crescent, avoided technology stocks. Yacktman won the case, kept his fund together, and went on to be proven right about avoiding technology stocks. Yacktman Focused’s 15-year record is the best of the bunch, bumping up against 13% annualized.

Never got the usefulness of Grids and Charts, since my Econ. 101 professor in 1966 use to Draw them for hours on his blackboards (remember them), I used to ask him to give us his point(s) in plain English...so much to his dis-may....He probably is still doing (drawing) them and I graduated to the "real world"....

Hi Guys,
Yesterday, in response to the MFO exchange on younger folks retiring comfortably-not, I recommended a Monte Carlo simulator from MoneyChimp to add to your retirement planning toolkit. I made that recommendation mostly because of its simplified input format. It has limitations.
Upon reflection, I recalled an alternative that also is rather simple to input, and offers its users a wider range of study options. The simulator was assembled by the Flexible Retirement Planner website. You might want to explore its many fine features. Here is the Link to it:
http://www.flexibleretirementplanner.com/wp/planner-launch-page/
It is much more comprehensive than the MoneyChimp version, yet takes only a few minutes to complete the requisite inputs. Enjoy.
Since I hadn’t run the code for quite some time, I did a few practice calculations.
For the 30 year retirement timeframe that I tested, it is not surprising that when I decreased portfolio volatility for an all equity portfolio from 20% annually to a 15% level, without substantially decreasing average annual returns (that’s almost plausible), 30-year portfolio survival rate for a 4% annual drawdown schedule increased from an unattractive 79% to a largely more acceptable 92% likelihood.
If bond-like returns of 5% (with standard deviation of 5%) are postulated for the portfolio with the same 4% drawdown schedule, the portfolio survival rate drops back to an uncomfortable 77%survival probability. This result reinforces the current financial advisor recommendation to keep a substantial fraction of a retirement portfolio in equity positions.
These are examples of the what-if analyses that Monte Carlo codes permit. The 3 illustrates that I reported took less than 5 minutes to input and to calculate completely. These types of analyses are almost too much fun. Please give it a try.
Best Regards.